New Delhi, March 7: After an interruption of several years, the plan of merger of BSNL and MTNL is back on the tables with top officials of the telecom department once again ‘brainstorming’ on various options.
According to sources, a top-level meeting took place in the Department of Telecom, discussing the possibility of merging of the two ruinous, state-owned entities facing financial stresses due to increasing competition in the sector.
On the hurdles to the move, sources said, staffing and salary related issues pose a big challenge.
Besides, they said, MTNL is debt-laden and while the move will be positive for it, BSNL will have to bear the brunt. MTNL has been reeling under "serious" debt problem and is borrowing money to meet its day-to-day requirements.
In written reply to the Rajya Sabha in November last year, Communications Minister Manoj Sinha had said, "In the case of MTNL, it has been going slow in upgradations of equipment during the last 4-5 years due to severe financial problems. MTNL is under serious debt burden and is borrowing money to meet its day to day requirements."
The total debt of MTNL reached Rs 19.41 crore at the end of December 31, 2016, from Rs 11.54 crore in 2012-13, according to official data. In 2015-16, MTNL reported total annual revenue of Rs 3,197.41 crore and the net loss of Rs 2,005.72 crore.
The losses of BSNL have narrowed, however, to Rs 4,890 crore for the nine-month period of the current fiscal, from Rs 6,121 crore in the year-ago period.
As per telecom regulator TRAI, as of December 31, BSNL and MTNL had a market share of about 9 percent of the total wireless subscriber base of 1.12 billion.
The idea of merging the two firms was first considered years ago by the erstwhile telecom minister, Pramod Majahan, and has been deliberated upon a few times since then. Officials said however that the talks on the merger have been revived at the instance of senior officials in the government.